Changes in Massachusetts Workers’ Compensation Rates

Presented by Michael Regan

The Commissioner of Insurance recently approved a general revision of Massachusetts workers’ compensation rates that was effective April 1, 2014, applicable to new and renewal policies. There was no change to the overall rate level; however most individual class rates will change to reflect industry group differentials.

This may not necessarily be a bad thing for you! Depending on the classifications used for your workers compensation policy the rates may increase or decrease within a range for any particular industry.

Workers’ compensation rates were last raised in 2001 by one percent. Although Loss of Wage coverage has not changed, medical costs, as we all know too well, have been skyrocketing and workers compensation rates have not kept pace. Given the recent political climate, there has not been an appetite by regulators to approve any increases.

After many years of asking for relief and not getting any, the insurance industry took a harder stance on writing workers compensation policies in Massachusetts. Some existing accounts were receiving non-renewal notices and new business was scrutinized by underwriting with a fine tooth comb. The end result was a spike in business to the Massachusetts Workers Compensation Assigned Risk Plan.

Some may see the allowance for rate changes within industry ranges, as a fig leaf offering between regulators and carriers. To the public there is no overall change, but it allows the carriers to get some rate relief in specific industries and classes that have been troublesome and the changes may better predict workers compensation losses. Bear in mind that not all rates will increase. In fact many are decreasing. For example; the rate per $100 of payroll for Electrical Wiring (code 5190) was $2.84 and is now going down to $2.74.

If you would like to review the effect of these changes on your policy please click on the following link where you can look up the rates as well as see what other changes may impact your business.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

Top 9 Garage Door Security Tips to Prevent Break-Ins

Garage doors are a common weak point when looking at security in a whole-home approach and an easy target for thieves. Garage doors are not only a weakness, but provide criminals a shelter once inside. To the casual passerby an open garage with a work truck pulled up to it doesn’t look out of place or scream break-in.

Securing your garage door doesn’t just mean the roll-up door; as you’ll read in the article below, you have to look at every entrance point as a vulnerability. Not that any loss to your family isn’t devastating, but one that occurs through a preventable measure just shouldn’t happen.

History of Automatic Garage Door Openers

When the first generation of automatic openers came out they all featured the same code. You can imagine the security risk by having one of these openers. Thieves could just drive a neighborhood pushing their purchased transmitter and if you had the same brand as they did; jackpot!

The second generation of openers increased their security by featuring dip switches that could be set by the owner to a unique combination. While this did increase security, most owners would leave the default setting on and guess what? Jackpot! Another security risk of the second-gen openers is that a code grabber could be utilized to gain access to your system. A code grabber device works by locking onto your signal and memorizing it. Then, all a thief would have to do is re-transmit the code and they were in.

Modern automatic garage door openers now feature rolling-code technology, where your remote will transmit a brand new security code each time you press your remote. There are over 100 billion codes, so the likelihood of a code grabber working is very slim. Be sure that your opener features this rolling-code technology! If need be, talk to your garage builder to include this technology in your opener.

Here are the top 10 most important things you can do to secure your garage.

  1. Don’t leave the garage door remote in your vehicle – If a thief breaks in to your car and steals the remote he has a way into your home.
  2. Invest in a keychain remote opener – Stop using that remote you clip to your visor and get a keychain remote opener that you can leave on your keys.
  3. Keep it locked – Put a deadbolt on the door between your house and garage; is it really that much of an inconvenience to have to use a key each time you come home?
  4. Make sure the door from your garage into your house is as secure as your front door – Ensure you have a strong, sturdy door made out of solid-core wood or reinforced steel and install an Anti-Kick device like the Door Devil on it!
  5. Don’t leave your garage door open – It is amazing how many people just leave their garage door open all the time. It’s just inviting someone to pop their heads in and grab something.
  6. Install a wide-angle peephole in the door between your house and your garage – You’ll at least be able to see what’s going on if you hear a strange noise; rather than opening the door to find out.
  7. Frost or cover your garage windows – Don’t do thieves any favors by enabling them to see when your vehicle is gone, a better idea would be to replace the door with one that lacks windows.
  8. Make sure your garage door is in excellent condition. If needed, contact local garage door repair companies for maintenance. Also, padlock the throw latch on your garage door when you’re out of town. If you don’t have a manual lock on your garage door, you can use a c-clamp tightened down on each side of the door track to effectively “lock” down the door. It’s similar to those small window track locks you can buy for your home interior windows.
  9. Don’t neglect maintenance on the mechanical parts of your roll-up garage door and keep an eye out for corrosion.
  10. Don’t forget the door from your garage to your house; check the frame, locks, hinges and any replaceable items. If needed, get in touch with Overhead Door Company or a similar firm in your area to upgrade the doors for added security.

Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures, and create a customized insurance portfolio. Give us a call today at 617-723-0700.

Key Points in the President’s 2015 Budget Proposal

Presented by John Steiger

On March 3, President Obama announced his $3.9 trillion budget proposal for fiscal year 2015. Although the budget is more of a presidential “wish list” at this point, it includes initiatives that, if passed by Congress, could have a great impact on wealthy and middle-class Americans alike.

Social security claiming strategies

The proposed budget briefly mentions eliminating “aggressive Social Security-claiming strategies, which allow upper-income beneficiaries to manipulate the timing of collection of Social Security benefits in order to maximize delayed retirement credits.” Many industry professionals are interpreting this to mean the end of the file-and-suspend strategy, which allows a social security claimant to file for benefits and immediately suspend them. The claimant’s spouse can then begin collecting his or her spousal benefit, while both the claimant and the spouse allow their retirement benefits to grow until age 70 using delayed retirement credits.

It’s important to note, however, that the language in the proposal is vague, and it’s unclear whether the ultimate target is the file-and-suspend strategy. Additionally, there is some question about how this change would take place—whether through an internal Social Security Administration rule change or an act of Congress. If the latter, it could take a great deal of time to implement, if it passes at all.

Tax cuts for middle-class Americans

The President’s budget proposes several tax incentives for middle-class workers, including doubling the maximum value of the Earned Income Tax Credit for workers without children, families with more than two children, and married couples, as well as expanding the child and dependent care credit.

Student loans and grants

The President also proposed student loan forgiveness for qualified taxpayers who borrow through federal programs. Any forgiven loans would be excluded from gross income. Additionally, Pell Grants would be excluded from gross income, provided that the funds are spent according to the program rules.

Loss of tax benefits for high-income individuals

As in past years, the President renewed proposals that would eliminate some tax benefits for wealthy Americans. Specifically, for individuals in the 33-percent tax bracket and higher, and those subject to the alternative minimum tax, the value of certain exclusions and deductions would be reduced to 28 percent. Additionally, the budget reintroduced the “Buffett rule,” which would require taxpayers with an adjusted gross income above $1 million to pay a tax rate of at least 30 percent on their income, excluding any charitable giving. Finally, the President proposed extending the temporary exclusion from income for forgiven home mortgage debt to January 1, 2017.

Changes to RMD rules

Another proposed change would waive the required minimum distribution (RMD) rule for individuals whose aggregate retirement plan and IRA assets do not exceed $100,000. Additionally, nonspouse beneficiaries of retirement assets would be required to fully deplete inherited assets within five years. Finally, the President proposed instituting RMD requirements for Roth accounts.

Retirement account changes

Along with the President’s proposal to institute RMD requirements for Roth accounts, contributions to those accounts would no longer be allowed after age 70½. Additionally, nonspouse beneficiaries of retirement accounts would be allowed to move funds into an inherited IRA using a 60-day rollover, as opposed to the current direct-transfer requirement. For taxpayers who accumulate retirement benefits over a certain threshold, further contributions and accruals would be prohibited. Finally, small businesses that do not offer qualified retirement plans would be required to offer automatic enrollment in an IRA for their employees.

Changes to estate and gift taxation

The budget proposal seeks to increase the maximum unified estate and gift tax rate from 40 percent to 45 percent and to reduce the exclusion amount from $5 million to $3.5 million for estate and generation-skipping transfer taxes, and $1 million for gift taxes. Additionally, the President proposed redefining the meaning of a gift transfer (by eliminating the present interest requirement) for purposes of the annual gift tax exclusion. The annual exclusion would be modified from $14,000 per donee to $50,000 per donor.

The President also proposed a minimum 10-year term for grantor retained annuity trusts; a 90-year limit on the duration of the generation-skipping transfer tax exemption; modifying the generation-skipping transfer tax treatment for health and education exclusion trusts; and coordinating certain income and transfer tax rules for grantor trusts.

Higher tax rate on investment manager income

As in past years, the President’s budget proposes taxing the carried interest portion of fund manager compensation as ordinary income instead of as a capital gain. This would increase the tax rate on that compensation from 20 percent to as much as 39.6 percent.


John B. Steiger is a financial consultant located at 460 Totten Pond Road, Suite 600, Waltham, MA 02451. He offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. He can be reached at (781) 547-5621 or at

© 2014 Commonwealth Financial Network®

2014 Changes affecting Federal Contractors

There have been significant developments in the labor policy arena during the first quarter of 2014.  In January, President Obama unveiled his plan to use an Executive Order to increase the minimum wage Federal Contractors pay their workers.  In March, a Presidential Memorandum was issued to the Department of Labor (DOL) to update and modernize the overtime pay system.  Additionally, the Final Rule of Section 503 of the Rehabilitation Act of 1973 which was amended in September 2013 will go into effect on March 24, 2014.  Federal Contractors need to be aware of these changes and the potential impact they have on DOL compliance.

Minimum Wage Increase/Overtime Protection

On February 12, 2014, President Obama issued an Executive Order to raise the minimum wage for Federal Contractors.  As of January 1, 2015, the minimum wage for affected federal contracting and subcontracting personnel will increase from $7.25 per hour to $10.10 per hour. Additionally, the Obama administration announced it will issue a Presidential Memorandum to the DOL instructing its Secretary to update regulations regarding overtime protection for workers under Federal Labor Standards Act (FLSA).   Any changes to the regulation will be the first since 2004, when the minimum weekly salary for overtime-exempt workers was increased to the current $455 per week.

Rehabilitation Act

On March 24, 2014 two final rules issued by the Federal Contracts Compliance Programs will go into effect, enhancing contractor’s hiring and affirmative action obligations for individuals with disabilities and covered veterans. The disability rule sets a seven percent goal for contractors’ employment of persons with disabilities across all job categories and introduces numerous compliance and reporting mandates.  If you would like more information on these rules please click here to read a fact sheet outlining the background and highlighting the regulations.

Given these diverse and often disparate developments, the importance of the Professional Service Council (PSC) and the Human Resource Labor Relations Committee (HRLRC) in conveying industry consensus viewpoints to government officials and as a forum for companies and policymakers to meet face-to-face has never been greater.   In addition to serving as a discussion forum with government officials, the HRLRC serves as a focal point for PSC’s policy and educational activities around the Service Contract Act ( SCA ), the Davis Bacon Act (DBA),  and a range of legislation and regulations governing contractor health, hiring and safety practices.

The committee welcomed Office of Federal Contract Compliance Programs (OFCCP) Policy Director, Debra Carr, for an extensive dialogue on its upcoming hiring requirements, and both PSC and OFCCP pledged to remain engaged as the new rule takes effect. HRLRC will also continue its longstanding engagements with the military and civilian agency labor advisors, along with officials from DOL and its component divisions.

During 2014, under the aegis of the HRLRC, PSC will continue to explore areas in which PSC members can benefit from expert insight and training. They will continue their HRLRC meetings during the year as well as their PSC- SCA two day courses, along with the DOL and DOD panels, which are an active part of their training programs.

Under the leadership of long-time committee chair Al Corvigno of MARAL, LLC and new committee co-chair Anne Rohall of Tech Systems, Inc., the Human Resources and Labor Policy Committee will continue to be the premier venue for PSC members focused on critical HR and labor policy issues.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.

Directors & Officers (D&O) Coverage

Presented by Justin Yurchenko

Every Board of Director member needs to realize the risks of operating any organization, and how to reduce those risks with appropriate management strategies. Written and implemented risk management procedures can serve as an effective way to monitor and mitigate risk within any organization. However, when these strategies are unsuccessful, the transfer of risk should fall to your insurance policy.

Directors and Officers insurance (D&O) is an important safeguard to any for-profit or nonprofit organization. D&O protects the directors, officers, employees, shareholders (not involved in management) and sometimes even volunteers. Unfortunately, even in today’s litigious environment, only 28% of companies with revenue of less than $100 million have purchased D&O coverage. In most cases, board members do not foresee any possible litigation, which is the main reason for not purchasing coverage. This is a common misconception, as just about any board can be a sued; moreover, claims can come from just about anyone – employees, customers, board members, vendors, creditors and current clients.

At the heart of any D&O policy lies the promise to indemnify the individual directors and officers in the event they are subject to allegations of wrongful conduct within their organizational duties. The primary coverages offered under a D&O policy are as follows:

  • Coverage for claims made against the company, its directors, officers, managers, employees and, sometimes, volunteers.
  • Employment Practices Liability, which includes allegations such as wrongful termination, discrimination, and harassment.
  • Fiduciary Liability coverage
  • Employee Dishonesty coverage
  • Kidnap & Ransom coverage

Choosing the right carrier and policy limits is often a difficult process. Each carrier has specialized coverage wording and exclusions. It is important to work with an experienced broker who can determine the best available combination of D&O pricing and coverage for your organizational needs.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.